TMI Blog2014 (3) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the applicant has made out a case of waiver of pre-deposit but as learned Counsel for the applicant at the time of hearing their stay application before the referral Bench has offered for making further deposit of ₹ 20 lakhs in addition to ₹ 40 lakhs already deposited, therefore, I agree with the view of learned Member (Judicial) directing the applicant to make pre-deposit of ₹ 20 lakhs - E/55238-55239/2013 - Stay Order Nos. SO/51104-51105/2014-EX(DB) - Dated:- 14-3-2014 - Ms. Archana Wadhwa, Member (J) and Shri Manmohan Singh, Member (T) Third Member on Reference : Shri Ashok Jindal, Member (J) Shri V. Lakshmi Kumaran, Advocate, for the Appellant. Shri Sanjay Jain, DR, for the Respondent. ORDER [Order per : Archana Wadhwa, Member (J) (for the Bench)]. - The prayer in the application is to dispense with the condition of pre-deposit of duty of ₹ 3,85,10,422/-, which stands confirmed against the appellant along with interest for the period April, 2006 to August, 2010. In addition penalty of identical amount stands imposed. 2. After hearing both sides duly represented by Shri V. Lakshmi Kumaran, learned advocate appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held to be process amounting to manufacture. As such, submits the learned DR that the appellants be directed to deposit the duty amount, as a condition of hearing of their appeal. 5. At this stage, learned advocate Shri Lakshmi Kumaran submits that appellant has already deposited an amount of ₹ 40 lakhs and their factory is lying closed. On being queried, he agrees to further deposit ₹ 20 lakhs for tlie purpose of Section 35F of the Central Excise Act. 6. After considering and appreciating the submissions made by both sides, we find that issue as to whether the process of printing as well as on lamination of printed poly film amounts to manufacture or not has to be considered in the light of different judgments on the issue. However, we are of the prima facie view that even if the printing amounts to manufacture, the final product which emerges would be printing under Printing Industries Act, thus classifiable under Chapter 49 which attract nil rate of duty. We also find prima facie favour with the appellant s contention that the extended period of limitation would not be available to the Revenue. However, taking into consideration that a part of the demand wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured on job work basis from those raw materials. It was also learnt that the customers for whom job work was being done were traders and not undertaking any manufacturing activity and they were not preparing any job work challans. It is also on record that Essar Packaging, Varanasi were engaged in printing of Monolayer, Multilayer and Laminated rolls. 9. The appellant could not adduce any proof regarding movement of inputs i.e. L.D. films, Polyester films, Metalised films, Ink Adhesives from his client to his unit. Under the provisions of Notification No. 214/86-C.E., dated 25-3-1986, goods manufactured on job work basis are exempted from payment of Central Excise duty, if such goods are used in the manufacture of goods on which duty of excise is leviable or such goods are cleared from the factory of supplier of raw material on payment of duty. Further, this exemption is applicable if the supplier of raw materials gives an undertaking to the Assistant Commissioner having jurisdiction over the factory or the job worker that the said goods shall be used in the manufacture of the dutiable final products in his factory or the same shall be removed on payment of duty from his f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct comes into existence. As per facts of the cited case, the party were buying duty paid film and laminating the same. In these facts and circumstances it was held by Hon ble Court that the film remains a film and no new and distinct product comes into existence. 13. Whereas in present case before us the party is printing/printing and laminating the film. When both the processes are taken together then a new and distinct commodity comes into existence which is printed and laminated plastic film. Once it printed as per requirement of the customer and laminated then it becomes a commodity ready to use for packing of goods, details of which are printed on it. Thus it is entirely a different commodity, quite different from plastic film. The film does not remain a film. Therefore, ratio of decision of Hon ble Supreme Court as made in the case of Metlex (I) Pvt. Ltd. is not applicable in the facts and circumstances of the present case. However, Tribunal in the case of Caprihans India Ltd. v. CCE, Surat-II [2006 (205) E.L.T. 175 (Tri.)], relying on the judgment of Hon ble Supreme Court in the case of Laminated Packings (P) Ltd. v. Collector - 1990 (49) E.L.T. 326 (S.C.), observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts) in terms of its user as also the thickness and lamination. Therefore, this process falls within the definition of manufacture as defined under Section 2(f) of the Central Excise Act, 1944. In our aforesaid view we are supported by the judgment of the Supreme Court in the matter of Laminated Packaging (P) Ltd. (supra) wherein the Supreme Court has held that polyethylene laminated kraft paper produced out of lamination on duty paid kraft paper with polyethylene amounts to manufacture. 16. Another issue taken by the appellant is the classification of impugned goods. The aspect of classification of impugned goods under Chapter 49 of Central Excise Tariff as product of printing industry was never contested/taken up before the adjudicating authority. The issue of classification is a matter of fact and needs to be taken at a proper forum and can only be decided with respect to the goods being actually manufactured and cleared during the impugned period because it has been held in umpteen number of judgments that classification can only be done on the character of goods at the time when they are cleared from the manufacturing unit. 17. Even though issue of classification is tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is well settled law that lamination and printing amounts to manufacture. Further, it is admitted by the appellant that they have undertaken manufacturing activity without the authority of law can clearing the goods clandestinely. Further Shri Atul Goel in his statement has also clearly admitted manufacturing without obtaining Central Excise registration. It is also comes out that they have wrongly shown the activity of job work when there is no issuance of challan and, there was no intimation to the Asst. Commissioner for registration with Central Excise department. 20. In view of the above, it is clear that balance of convenience is in the favour of Revenue. Interest of justice shall be met if appellant are directed to make pre-deposit of ₹ 1.00 (one crore) as a condition for hearing the appeal in addition to ₹ 40 lakhs already deposited during investigation. 21. On deposit of this amount within 8 weeks, from the date of this order, balance amount of duty, penalty and. interest would stand waived and its recovery stayed during the pendency of the appeal before Tribunal. Matter to come up for ascertaining compliance on .. Sd/- (Manmohan Singh) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity of printing/lamination of plain film rolls does not amount to manufacture. Further, he submits that the activity of printing falls under Chapter 49 of the Central Excise Tariff Act wherein printing industry has been exempted from payment of duty. He further submits that although in the case of Markwell Paper Plast Pvt. Ltd., reported in 2012 (285) E.L.T. 76 (Tri.-Del.) it is held that the activity of printing/lamination on metalized film amounts to manufacture. But the same Bench in the case of HBD Packaging Pvt. Ltd., reported in 2012 (284) E.L.T. 727 (Tri.-Del.) has held that printing and plastic/varnish coating on plain paper board does not amount to manufacture. Therefore, there are two contrary decisions of this Tribunal. In these circumstances the applicant is entitled for complete waiver of pre-deposit in the light of the decision of this Tribunal in the case of Maharashtra Seamless Ltd., reported in 2012 (286) E.L.T. 93 (Tri.-Del.). He further submits that the process of printing does not amount to manufacture as held by Hon ble Apex Court in the case of J.G. Glass Industries Ltd., reported in 1998 (97) E.L.T. 5 (S.C.). He also relies on the decision in the case of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and circumstances of this case. The issue has been examined by this Tribunal in the case of Markwell Paper Plastic (P) Ltd. (supra) wherein this Tribunal has held that printing and lamination of poly film changes the character of the product in question and altogether a new product emerges and that fact was not disputed by the department. In that case this Tribunal concluded that the activity undertaken by the appellant amounts to manufacture. Therefore, input credit taken by the appellant is not denied. The issue further came before this Tribunal in the case of HBD Pvt. Ltd. (supra) where the issue was whether printing and plastic varnish coating on plain paper board amounts to manufacture or not and in that case this Tribunal has held as under : 7. Coming to the question as to whether the process of printing as per customer s specification and plasting/varnish coating of the paperboard either purchased by the appellant from outside or received from their Baddi unit for job work, amounts to manufacture, for this purpose the department has to lead evidence showing that by this process, a commercially new product with distinct name, character or usage has emerged. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both can be used for making cartons for packaging. Hon ble Supreme Court in case of Rollatainers Ltd. v. Union of India reported in 1994 (72) E.LT. 793 (S.C.), which has also been relied upon in its above-mentioned judgment in case of Union of India v. J.G. Glass Industries Ltd. (supra) has held that the plain carton even after printing remains a carton i.e. the product of packaging industry and they do not become the product of printing industry after printing. 9. In view of the above discussion, we hold that the process of printing and varnish/plastic coating of plain cartons received by the appellant does not amount to manufacture and as such no duty is chargeable on the same. The impugned order, therefore, is not sustainable. The same is set aside. The appeal is allowed. Thereafter, this Tribunal concluded that the activity of printing and plastic coating does not amount to manufacture. During the course of arguments, it is asked from the learned D.R. regarding the use of plain poly films rolls. The query was answered that the same can be used as packing material. In this case, as per the learned AR there is no change in the use of goods after printing and lamination. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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